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Competition and Infrastructure Stewardship

Competition and Infrastructure Stewardship

Last updated on: July 17, 2015 at 12:08 pm by Acton Institute

Competition and Infrastructure Stewardship 2015-07-17T12:08:12-04:00 Acton Institute

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By Jordan Ballor

The state of Michigan is in the midst of something of an infrastructure crisis. We’re consistently ranked as among the states with the worst roads in the nation, something of an embarrassment for what used to be the automotive capital of the US. This infrastructure challenge is also no doubt part of a legacy of a state with one of the more troubled economies in the nation over the previous decade. (In spite of all this, Michigan remains a beautiful state with wonderful people, something Thrillist noted in recently ranking the Mitten state as the best state in America!)

To President Obama’s quip about infrastructure to business leaders, “You didn’t build that,” one might be tempted to retort that, in Michigan at least, that’s also increasingly true for the government. The roads aren’t being maintained in anything like a responsible fashion.

The voters of Michigan recently defeated Proposal 1, which was put forth by the state’s politicians as the only feasible solution. The voters actually saw it for what it was: a game of brinkmanship and blame-shifting. The defeat of Prop 1 put the onus back on the elected politicians to actually do their job and undertake the tough work of governing.

There have been a number of other ideas floated after the end of Prop 1, and part of that overhaul of our state’s approach to infrastructure investment and maintenance includes debate over so-called “prevailing” wage laws that require “union-scale wages and benefits on public construction contracts.”

As John Kennedy, president and CEO of Autocam Medical and a member of the Acton Institute’s board of directors, writes, “Michigan is ranked 29th in household income (below average) and is one of only 6 states that has a prevailing wage mandate based on union contracts. We also have a shortage of workers to fill skilled trades’ jobs. The 50-year history has proven that a prevailing wage mandate has not better prepared our workers to fill the skilled trades’ needs nor has it significantly changed income levels. Therefore, it makes no sense that we should keep what isn’t working.”

The Journal of Markets & Morality recently published a controversy on the question, “Are labor unions essential for social flourishing?” The participants were Brian Dijkema, program director for Work and Economics at the Hamilton, Ontario think tank Cardus, and Charles W. Baird, emeritus professor of economics at California State University, East Bay (CSUEB), and author of Liberating Labor. One of the important points arising from the controversy is that we need to worry not only about our physical infrastructure, but also, as the folks at Cardus are fond of saying, our “social architecture” as well.

The four essays comprising the controversy are worth reading, but I would also like to note that Dijkema also has recently written a piece examining issues related to competition in the Canadian context. I’m not the only person who has noted the difference in quality between the roads once one crosses the Ambassador Bridge, but the province of Ontario is not without its own challenges. Thus, writes Dijkema, “The lack of competition in an increasing number of major Ontario construction markets — including Toronto, Hamilton, and Waterloo — mean that we are not getting the mileage out of the money we are spending on public infrastructure. This means that Ontarians will either pay more for their water treatment plants and transit stations, or get less of them; likely both.”

Competition is an essential tool for responsible stewardship of government funds, and anything that distorts competition, whether prevailing wage laws or the unique requirements Dijkema describes, warrants serious and critical scrutiny.

Originally published at the Acton PowerBlog

Photo credit: Daniel Parks

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